A $1 million death benefit may be reasonable when replacing several years of income, covering a mortgage, funding education and providing a transition reserve. The amount alone does not determine whether an application will be approved.
Financial justification
Carriers often consider income, assets, liabilities and the purpose of the coverage when evaluating larger applications.
Underwriting requirements
Depending on age, carrier and amount, underwriting may include medical records, labs or an exam. Accelerated programs may be available but are not guaranteed.
Term selection
Ten-, 20- and 30-year terms can produce substantially different premiums. Match the term to the years the financial exposure is expected to exist.
Consider a ladder
Several policies with different expiration dates can reduce total long-term cost when the need for coverage is expected to decline.
Key takeaway
Premium is what you pay. Death benefit or coverage amount is what the policy pays after an approved claim. The best value is appropriate coverage with a premium the household can sustain—not simply the lowest advertised number.